Caught Short by the Inevitable

When something is inevitable (as opposed to... evitable), it would be wise to anticipate your next move ahead of time!



It always used to confound me as a puppy medical rep driving around the beige streets of Ruislip, England, how profoundly stunning the green traffic lights were.

Not stunning to me, I hasten to add. The dreamy folk of Ruislip, who would craw along the roads as though rehearsing their own funeral cortege, would creep up to the traffic light in a gingerly fashion. This would ensure it turned red, at which point so they would bathe in the relief of stopping the car altogether. And there they would wait.

After a peaceful interlude, during which time warm breezes blew and the Ruislip driver’s mind would float off down purple scented paths to seek a sunlit upland of serenity, the traffic lights would inexplicably and with no provocation or warning (save for, say, an amber light) turn green. This would throw the Ruislip driver into a kaleidoscopic headspin as the reverie unwound like a ball of wool in a propeller.

The resulting delay between this mental onslaught and the driver’s cogs finally shifting into gear was usually so long that the lights had enough time to return to red. Which was the same colour my face used to go though, oddly, not my language (which would explore the somewhat bluer end of the spectrum).

And the reason for this jolly anecdote? Well, it’s bemusing how the inevitable can still be such a surprise. Which brings me to the matter of Loss of Exclusivity and generics.

One day, a pharmaceutical company is going to come up with The Cure For Cancer. And they will look upon it and it shall be good. But from the very moment that some bloke in a white coat scrapes the crude gunge off the bottom of his test tube for the first time, he will have twenty years’ licence to flog to whomsoever he will and at whatsoever price. After that, he doesn’t.

And yet, with that knowledge, the industry still behaves like it’s an affront. Why shouldn’t the company that developed The Cure For Cancer be in some way honoured for its endeavours with rewards in perpetuity? Alexander Fleming is remembered for discovering penicillin; Nicholas Terrett and Peter Ellis discovered Viagra. But anybody can make penicillin now and they’ll be able to do the same for Viagra very soon too. It seems that praise and honour are eternal; revenue isn’t. So get used to it!

And since the bulk of the revenue comes from one very powerful source – i.e government (politics can be defined crudely as the distribution of money through dogma) – you can expect there to be some limits. There shouldn’t be any surprises that, when the patent ends, so does the gravy train.

There are numerous examples of companies trying in the dying days of the product’s lifecycle to reformulate their star compound to make it ‘more difficult’ for a generic house to copy. The most spectacular was Losec MUPS (Multi-Unit Pellet System), a desperate attempt on the part of AstraZeneca to delay the erosion of their business. Nobody was fooled; in fact, quite a lot of people were actively pissed off, especially in government circles.

The flaw in this strategy is that files submitted as part of the Market Authorisation of a drug are de facto in the public domain. The information is not confidential, it is merely embargoed. Anyone can have access to it and start preparing their own generic versions long before patent expiry. They can even start marketing the API to other generic houses; they just can’t market it as a medication before the expiry date. (Unless it’s for HIV in Africa, but that’s another story)

The upshot was that omeprazole went off patent and the specification handed down to generic houses was for the original formulation and not the new-improved-cobblers-with-knobs-on version.

AstraZeneca, however, did have a card up its sleeve. A useful trick that has been performed on quite a few occasions in various countries with other molecules. Omeprazole is a racemic mixture and, like many others, only one enantiomer is pharmacologically active, the S-enantiomer. Since this hadn’t been registered with the powers-that-be, it was quickly dusted down and Nexium (esomeprazole) was born. And it sells pretty well, especially in the USA.

Well, fair play to them. If the regulatory authorities are going to be so stupid to think that it’s a brand new chemical entity and not point out that esomeprazole has been chucked down patients’ throats by the ton already (albeit as one half of the racemic mixture), then they deserve their success.

Undoubtedly, Nexium took some pre-planning. What is really galling is the number of times companies try to pull the reformulation trick with 6 months to go before patent loss. It’s a dumb, pathetic and buttock-clenching exhibition of short-sighted knee-jerk management. And it deserves to be pilloried.

If your company hasn’t been able to turn a decent profit during the period of exclusivity or, as is more likely nowadays, you’ve got sod-all in your pipeline then you’re telling the world: ‘I am crap at my job and I am bankrupt of ideas’.

The time to start planning for patent loss is pretty much when that gunge is scraped off the bottom of the test tube for the first time. Certainly when the molecule goes forward to Candidate Selection, when it’s potential for sales and profitability should be being assessed, that’s when post-patent strategies should be set in train.

The generic companies in Iceland, Korea and India are already manufacturing APIs years before loss of patent; but the originators have the time advantage of being able to develop the generic supply chain well ahead of patent loss. 

Failure to plan means planning to fail. So, if you don’t do anything about genericization until it’s too late: you’ll make an exhibition of yourself, you will preside over the collapse of that part of your business, you will unnerve your investors, you will risk pissing off your customers. And you’ll bring the industry into disrepute.